Updated Sector Paper on

1
27th Voorburg Group Meeting on Services
Statistics
Updated Sector Paper on Industry ISIC
61 Telecommunications
Liam Murray Warsaw, Poland October 1st - 5th,
2012  
2
History of Telecommunication SPPI Voorburg
groups meetings

• First discussed on the 4th Voorburg Group meeting
  in 1989
• Audiovisual services were revisited in 1990 and
  1992 - Canada, France, Finland and Sweden
  discussed model survey for audiovisual services
• Telecommunication services were discussed several
  times since 1993
• Both prices (Austria, Germany and France) and
  turnover (Canada, Norway and The Netherlands)
  were discussed on the 23rd Group in 2008
• A sector paper presented by INSEE on the 24th
  Voorburg Group meeting
• Updated Telecommunication Chapter for the
  purposes of the Methodological Guide to be
  published later this year

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Background

• Traditionally a monopoly or oligopoly market
• Deregulation and lower entry markets increased
  competition in recent years
• Large growth experienced in recent years
• Revenue stood at 864bn in 2010 - 13.5 higher
  than the 762bn in 2006
• (OfCom, 2011)
• Approximately 30 of the worlds population were
  internet users by 2010
• (ITU, 2011)
• Around 1.2 billion of users accessed the internet
  via mobile networks
• (OfCom, 2011)

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Background (cont.)

• Industry trends
• Regulation, such as the EU Electronic
  Communication Framework
• Technology, including fibre optic cables,
  next-generation core networks
• Consumers movement to new services, such as the
  substitute of fixed broadband by mobile broadband
• Other market changes
• Convergence, i.e. Horizontal integration which
  brings together information technology,
  telecommunication and media
• Bundling, i.e. sale of a number of services
  combined in a single price package

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Classification - Industry
ISIC (Rev. 4) NACE (Rev. 2) NAICS (v. 2007) ANZSIC (v. 2006/Rev. 1) Class (Group)
6110 6110 5171 5801 Wired telecommunication activities
6120 6120 5172 5802 Wireless telecommunication activities
6130 6130 5174 5809 Satellite telecommunication activities
6190 6190 5179 5809 Satellite telecommunication activities
6190 6190 5179 5809 Other telecommunication activities
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Classifications - Product

• Product classifications not harmonized to the
  same degree
• CPC rev 2
• 15 subclasses but only 3 within scope
• 841 Telephony and other telecommunications
  services
• 842 Internet communication services
• 8463 Broadcasting, programming and programme
  distribution services
• CPA 2008
• 24 items in total - slightly different from CPC
• Directly linked with NACE industry classification
• NAPCS (2007)
• More than 50 sub-items
• Complimentary to NAICS
• Some item not within scope (e.g. repair services
  for telecommunication equipments)

7
SPPI development

• Direct use of repeated services most common
  method
• It can easily identify any potential changes in
  quality.
• Low response burden/less expensive
• Product specification at base period needs to be
  quite detailed
• Summary of the Pricing Method for
  Telecommunications SPPI

8
SPPI Development Main issues

• Scope
• Business to Business vs Business to All
• Depends on the service activities, the pricing
  methods and data availability
• Bundling
• Break down the bundle into separate services and
  price separately
• Price bundled services together as a group
• Quality issues
• Ensure constant quality and adjust for quality
  changes
• Introduction and omission of new services might
  prove difficult if using a Laspeyres index

9
Turnover statistics

• Turnover statistics can be collected through
  surveys

• Precise turnover detail can be defined
• Data can be collected with the desired
  periodicity
• Allows the construction of I-O tables
• High respondent burden
• High cost
• Low response rate

• Alternatively turnover can be collected through
  administrative sources

• Little or no respondent burden
• Large coverage
• Less expensive
• Data coverage and definition can be ambiguous
• Least timely

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Turnover statistics Main issues

• Clear and precise definition needed
• Tax declaration for tax purposes should be
  excluded
• Revenues generated from non-turnover producing
  activities should be omitted e.g. sales of fixed
  assets
• Turnover should be broken down by primary and
  other activities to avoid over/under coverage in
  frame and estimates

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Further suggestions

• The developed telecommunications SPPI is required
  to undergo frequent quality assurance by
• Re-weighting service products more frequently to
  capture rapid changes in service consumption
• Researching methods of capturing the price of
  bundled service products and addressing
  convergence of the telecommunications with media
  and IT
• Using a standard method of quality adjustment of
  business telecommunications in order to capture
  technology developments

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Thank you for your attention Questions and Answers
Liam Murray Warsaw, Poland October 1st - 5th,
2012